Mortgage Lending in Philadelphia: Key Take-Aways from the 2021 Home Mortgage Disclosure Act Data Release

The release of 2021 Home Mortgage Disclosure Act (HMDA) data provides an opportunity to look at the local mortgage lending environment – trends in loan volume, the kinds of loans being made, where loans are made, how efficiently different groups can access credit, and how key features of originated mortgages vary across different racial groups in Philadelphia.

Findings from an analysis of these data suggest that overall home purchase originations in Philadelphia continued to steadily increase over the last several years, origination rates have steadily increased to their highest levels in a decade, and FHA/VA market share in the home purchase market resumed its long run decline from the last housing crisis. And the low interest rate environment of 2021 supported an elevated refinance market, which returned to levels not seen in over a decade.

Despite these encouraging signals for the mortgage market overall, substantial disparities remain between different borrowers and neighborhoods throughout the city in terms of their access to mortgages, and in the costs of the mortgage products they do obtain. In addition, large swaths of the Philadelphia housing market are increasingly transitioning to investor-dominated cash markets, that may potentially crowd out prospective borrowers in the city’s most affordable markets.

The results presented in this brief are most certainly cause for concern about the persistent racial and ethnic disparities in access to credit and the cost of credit, particularly within the current environment of dramatic interest rates increases.